/regulation & compliance

News and resources on regulation, compliance, legal and governance issues for banks and fintechs.

European Commission: Caps on interchange fees have proved their worth

The European Commission says regulations to cap the interchange fees charged to merchants by the global card schemes have had the desired effect of reducing costs to merchants and driving cross-border acquiring.

  14 1 comment

European Commission: Caps on interchange fees have proved their worth

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

The main objectives of the initial 2015 Regulation were the creation of a single market for card payments and the prevention of competition restrictions, including the inability of merchants to negotiate fees below the interchange fees levels. The separation of card schemes from entities processing card transactions was specified by Regulatory Technical Standards, which entered into force on 7 February 2018.

The follow-up study submitted to the European Parliament concludes that the main objectives of the rule changes have been achieved, as interchange fees for consumer cards have decreased, "ultimately resulting in improved services to consumers and lower consumer prices".

Furthermore, market integration has improved through the increased use by merchants of acquirers located in other Member States and more cross-border card transactions.

The Commission says that further monitoring and data gathering is necessary in some areas, including those where only limited time has elapsed since the Regulation entered into force.

"Given the positive impact of the IFR and the need for more time to see the full effects of the Regulation, the report is not accompanied by a revision legislative proposal."

Sponsored [Webinar] 2025 Fraud Trends: Synthetic Identity, AI and Incoming Mandates

Comments: (1)

A Finextra member 

UNBELIEVABLE! The elephant in the room which the Commission appear to have disregarded for now is that card scheme fees which fall outside of the regulation, have, particularly since 2018, i.e. the period outside of the E&Y study period, increased significantly adding, (if other reports are to be believed) c.€800m additonal costs to merchants eroding at least 50% of the savings intially achieved by the introduction of the IFR. In addition, one of the major card schemes has clearly indicated in their investor reports, that they'll continue to raise fees. What a missed opportunity!  

[Webinar] PREDICT 2025: The Future of AI in the USFinextra Promoted[Webinar] PREDICT 2025: The Future of AI in the US